F.I.LA. GROUP INTERIM REPORT · Consolidated Financial Statements of the F.I.L.A. Group at March 31, 2016 Index The F.I.L.A. Group key financial highlights for Q1 2016 are reported

F.I.LA. GROUPINTERIM REPORT

at march 31, 2016

Directors’ Report at March 31, 2016

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Contents

I - Directors’ Report ............................................................................................................................. 4

Corporate Boards ................................................................................................................................ 4Overview of the F.I.L.A. Group.......................................................................................................... 5F.I.L.A. Group Structure ..................................................................................................................... 6Significant Events in the period .......................................................................................................... 7Operating performance ....................................................................................................................... 9

F.I.L.A. Group Key Financial Highlights ......................................................................................... 11Normalised operating results ........................................................................................................ 11Statement of Financial Position .................................................................................................... 14Financial overview ........................................................................................................................ 16

Disclosure by operating segment ...................................................................................................... 21Business Segments – Statement of Financial Position .................................................................. 23Business Segments – Income Statement ....................................................................................... 26Business Segments – Other Information ....................................................................................... 29

Business seasonality .......................................................................................................................... 30Business Combinations ..................................................................................................................... 31Subsequent events ............................................................................................................................. 37

Treasury shares ................................................................................................................................. 37

II - Consolidated Financial Statements of the F.I.L.A. Group at March 31, 2016 ........................ 38

Consolidated Financial Statements ................................................................................................... 38Statement of Comprehensive Income ........................................................................................... 39Statement of Changes in Equity .................................................................................................... 40Condensed Consolidated Statement of Cash Flow ....................................................................... 41

Transactions relating to atypical and/or unusual operations ............................................................. 43

Declaration of the Executive Officer for Financial Reporting .......................................................... 44


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DIRECTORS’ REPORT

AT MARCH 31, 2016

DIRECTORS’ REPORT at march 31, 2016


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I - Directors’ Report

Corporate Boards

Board of Directors

Chairman Gianni Mion

Chief Executive Officer Massimo Candela

Executive Director Luca Pelosin

Director & Honorary Chairman Alberto Candela

Director (**) Fabio Zucchetti

Director (**) Annalisa Barbera

Director (*) Sergio Ravagli

Director (*)(***) Gerolamo Caccia Dominioni

Director (*) Francesca Prandstraller

(*) Independent director in accordance with Article 148 of the CFA and Article 3 of the Self-

Governance Code.

(**) Non-Executive Director.

(***) Lead Independent Director.

Control and Risks Committee

Gerolamo Caccia Dominioni

Fabio Zucchetti

Sergio Ravagli

Board of Statutory Auditors

Chairman Claudia Mezzabotta

Standing Auditor Stefano Amoroso

Standing Auditor Rosalba Casiraghi

Alternate Auditor Pietro Villa

Alternate Auditor Sonia Ferrero


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Overview of the F.I.L.A. Group

The F.I.L.A. Group operates in the creativity tools market, producing colouring, design, modelling,

writing and painting objects, such as pencils, crayons, paints, modelling clay and chalk, among others.

The F.I.L.A. Group at March 31, 2016 operates through 13 production facilities and 22

subsidiaries across the globe and employs approx. 6,000, becoming a pinnacle for creative

solutions in many countries with brands such as GIOTTO, Tratto, DAS, Didò, Pongo and

LYRA.

Founded in Florence in 1920, F.I.L.A. has achieved strong growth over the last twenty years,

supported by a series of strategic acquisitions: the Italian Company Adica Pongo in 1994, the

US Group Dixon Ticonderoga in 2005, the German Group LYRA in 2008, the Mexican

Company Lapiceria Mexicana in 2010 and the Brazilian Company Lycin in 2012. In addition

to these operations, on the conclusion of an initiative which began with the acquisition of a

minority stake in 2011, control was acquired in 2015 of the Indian company Writefine

Products Private Limited.

On February 3, 2016, F.I.L.A. S.p.A. in addition acquired control of the Daler-Rowney Lukas

Group, an illustrious brand producing and distributing since 1783 materials and accessories

on the arts & crafts market, with a direct presence in the UK, the Dominican Republic,

Germany and the USA.


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F.I.L.A. Group Structure

The F.I.L.A. Group structure at March 31, 2016 is presented below.

0.79%

0.0001%

99.21%

95%

5.00%

0.051%

100.0% 100.0% 100.0%

51.66%

100.0% 100.0% 100.0%

48.34%

99.998% 99.998% 99.990% 99.998%

49.0%

100.0%

0.47%

100.0%

100.0% 100.0%

52% 80%

100.0% 100.0% 100.0%

100% 70%

100.0%

F.I.L.A. S.p.A.

OMYACOLOR S.A.

(France)

94.936%

F.I.L.A. CHILE LTDA

(Chile)

100.0%

100.00%

F.I.L.A. HISPANIA S.L. (Spain)

96.77%

Dixon Ticonderoga

Company

(U.S.A.)

FILA ARGENTINA S.A.

(Argentina)Fila Stationary and Office

Equipment Industry Ltd. Co.

(Turkey)

100.00%

Dixon Ticonderoga Inc.

(Canada)

Fila Dixon Art & Craft

Yixing Co.,Ltd

(China)Fila Hellas SA

(Greece)

50.00%

Industria Maimeri S.p.A. (Italy)51.00%

Fila Stationary O.O.O.

(Russia)

90.00%

F.I.L.A. -Dixon, S.A. de

C.V. Group

(Mexico)

Fila Dixon Stationery

(Kunshan) Co., Ltd. (China)

Xinjiang F.I.L.A.

Dixon Plantation Co.

Ltd. (China)

Licyn Mercantil Industrial Ltda

(Brazil)

99.99%

FILA LYRA GB Ltd

(United Kingdom)

Beijing F.I.L.A.-Dixon

Stationery Company Ltd

(China)

Dixon Comercializadora

S.A. de C.V.

(Mexico)

Dixon Ticonderoga de Mexico

S.A. de C.V.

(Mexico)

Fila Polska Sp. Z.o.o (Poland)

51.00%

Maimeri S.p.A.

(Italy)

1.00%Renoir Topco Ltd

(United Kingdom)

Servidix S.A.

de C.V.

(Mexico)

0.002%Dixon Mexico, SA. De CV

(Mexico)

Fila SA PTY LTD

(South Africa)

90.00% 100.0%

5.013%

Renoir Midco Ltd

(United Kingdom)WRITEFINE PRODUCTS PVT

LTD (India)

51.00%

100.0%

Renoir Bidco Ltd

(United Kingdom)Pioneer Stationery Pvt Ltd.

(India)

Fila Australia

PTY LTD

(Australia)

100.00% 100.0% 100.0% 100.0%

Daler Rowney Group

Ltd (United Kingdom)

Daler Rowney S.A.

(Belgium)

Daler Rowney Ltd

(United Kingdom)

Lyra Gmbh & Co. KG

(Germany)

99.53%

100.0% 100.0% 100.0% Daler Rowney Gmbh

(Germany)

PT. Lyra Akrelux

(Indonesia)

Lyra Scandinavia AB

(Sweden)

100.0% Rowney & Co.

(Pencils) Ltd

(United Kingdom)Lukas-Nerchau Gmbh

(Germany)

Nerchi Gmbh

(Germany)

Rowney (artists

brushes)

(United Kingdom)

Lastmill Ltd

(United Kingdom)

Longbeach Arts Ltd (United

Kingdom)

Daler-Rowney U.S.A.

Ltd (U.S.A.)

Daler Board Company

Ltd (United Kingdom)

Lyra Verwaltungs

Gmbh

(Germany)

LYRA Asia PTE LTD

(Singapore)

Daler Holdings Ltd

(United Kingdom)

Bridshore Srl

(Dominican Republic)

Daler Designs Ltd

(United Kingdom)


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Significant Events in the period

On January 4, 2016, the period for the exercise of the “F.I.L.A. S.p.A. Market Warrants”

concluded. Overall, 8,153,609 Market Warrants were exercised between December 1,

2015 and January 4, 2016 (“Deadline” as communicated by the Issuer on December 1,

2015) against the subscription of 2,201,454 ordinary shares. As established by paragraph

5.1 of the “F.I.L.A. S.p.A. Market Warrants” Regulation, the remaining 22,685

unexercised “F.I.L.A. S.p.A. Market Warrants” are cancelled and entirely invalid;

On February 3, 2016, F.I.L.A. S.p.A. acquired 100% of the entire share capital -

comprising “ordinary shares” and “preference shares” - of Renoir TopCo Ltd, the holding

company of the Daler-Rowney Lukas Group, from the private equity fund Electra

Partners LLP and the management team of Daler-Rowney.

The Daler-Rowney Group has produced and distributed since 1783 materials and

accessories for the art & craft sector. With a direct presence in the UK, the Dominican

Republic (production), Germany and the USA (distribution), Daler-Rowney Lukas

appeals to a wide consumer base and presents a perfectly complementary range to that of

F.I.L.A. S.p.A.. In the US, Daler-Rowney Lukas since 2009 has been the principal

supplier of art materials to Walmart.

The acquisition of the entire share capital of Renoir TopCo Ltd involved total

consideration of Euro 80.8 million, of which Euro 2.6 million as payment for the

“ordinary shares”, Euro 12.7 million as payment for the “preference shares” and Euro

65.5 million for redemption of the Loan Notes held by the sellers, in addition to the price

adjustment of Euro 0.3 million in March 2016, in accordance with the purchase contract.

The acquisition of the Daler-Rowney Lukas Group represents a further concrete step

towards FILA’s strengthening of its presence on the art & craft market, significantly

increasing distribution and commercial synergies with the colour and creative instruments

market, in line with F.I.L.A. S.p.A.'s acquisition-led growth strategy.

The integration with the Daler-Rowney Lukas Group is undertaken in fact to tap into

significant cost synergies - through optimising the production structure, the sales force

and overhead costs - in addition to revenue synergies through increasing the sales of the

Group’s products.


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The operation was entirely financed through a medium-term bank loan, issued in

February 2016, by Unicredit S.p.A., Intesa Sanpaolo S.p.A. and Mediobanca Banca di

Credito Finanziario S.p.A. for a total amount of Euro 130 million, which includes a

revolving line to cover any needs generated by Group working capital.


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The F.I.L.A. Group key financial highlights for Q1 2016 are reported below.

Euro thousands Q1 2016% on core

business revenueQ1 2015

% on core business

revenue

of which:

D&R Group(1)

of which:

Writefine(1)

Core Business Revenue 82,896 100.0% 57,091 100.0% 25,805 45.2% 10,625 10,693

EBITDA 10,143 12.2% 8,273 14.5% 1,870 22.6% 423 1,775

EBIT 6,853 8.3% 6,321 11.1% 532 8.4% (324) 872

Net financial charges (4,309) -5.2% (634) -1.1% (3,675) 579.7% (29) (49)

Total income taxes (2,486) -3.0% (1,662) -2.9% (824) 49.6% 54 (309)

F.I.L.A. Group Net Profit/(loss) (288) -0.3% 3,827 6.7% (4,115) -107.5% (299) 221

Earnings/(loss) per share (€ cents)

basic (0.01) 0.13

diluted (0.01) 0.13

NORMALISED - Euro thousands Q1 2016% on core

business revenueQ1 2015

% on core business

revenue

of which:

D&R Group(1)

of which:

Writefine(1)

Core Business Revenue 82,896 100.0% 57,091 100.0% 25,805 45.2% 10,625 10,693

EBITDA 11,870 14.3% 8,516 14.9% 3,354 39.4% 423 1,775

EBIT 8,580 10.3% 6,564 11.5% 2,016 30.7% (324) 872

Net financial charges (1,217) -1.5% (634) -1.1% (583) 91.9% (29) (49)

Total income taxes (2,707) -3.3% (1,739) -3.0% (968) 55.7% 54 (309)

F.I.L.A. Group Net Profit 4,310 5.2% 3,994 7.0% 316 7.9% (299) 221

Earnings per share (€ cents)basic 0.11 0.14

diluted 0.11 0.14

Euro thousands

Cash Flow from operating activities

Investments

% on core business revenue

Euro thousands

Net capital employed

Net Financial Instruments

Net Financial Position

Equity

(1) “Core Business Revenue" and “Net financial charges" are reported net of Intercompany transactions

Change

2016 - 2015

Change

2016 - 2015

March 31, 2016 March 31, 2015Change

2016 - 2015

(26,802) (26,084) (718)

1,988 2,337 (349)

0 (21,504) 21,504 0

2.4% 4.1%

March 31, 2016 December 31, 2015Change

2016 - 2015

of which:

D&R Group

393,506 271,975 121,531 94,353

(166,344) (38,744) (127,600) (83,214)

(227,162) (211,727) (15,435) (11,139)

• The normalisation of the Q1 2016 EBITDA relates to non-recurring operating costs of

approx. Euro 1.7 million, principally for consultancy in support of M&A operations

carried out by the Group.

• The normalisation of Net financial charges of Euro 3,092 thousand relates to the

exchange adjustments on the loan in UK Sterling for the acquisition of the Daler-


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Rowney Group, net of financial income on the currency hedging derivative opened on

the loan.

• The normalisation of the Q1 2016 Group Result concerns the above-stated

normalisations, net of the tax effect.

• The normalisation of the Q1 2015 EBITDA concerns non-recurring operating costs of

approx. Euro 243 thousand, principally for the company’s listing process.

• The normalisation of the Q1 2015 Group Result concerns the above-stated

normalisations, net of the tax effect.

At March 31, 2016, the market warrants conversion effect resulted in a contraction in the

earnings per share compared to the comparative period.


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F.I.L.A. Group Key Financial Highlights

The F.I.L.A. Group Key Financial Highlights for Q1 2016 are reported below.

The figures for the first quarter of 2016 take into consideration the full consolidation of

Writefine Products Private Limited, the majority share of which was acquired in November

2015, and of the Daler-Rowney Lukas Group, consolidated from February 3, 2016. For the

comparability of the March 31, 2015 and December 31, 2015 figures, the “Disclosure by

operating segment” paragraph reports the income statement and statement of financial

position at like-for-like consolidation scope, eliminating therefore the effects from the

corporate operations.

For further details on the consolidation effects of the Daler-Rowney Lukas Group, reference

should be made to the “Business combinations” paragraph.

Normalised operating results

The first quarter 2016 F.I.L.A. Group results report an increased EBITDA of 39.4% on the

first quarter of 2015 (+15.8%, excluding the M&A effect concerning the Daler-Rowney

Lucas Group and Writefine Products Private Limited - India).


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NORMALISED - Euro thousands

Q1 2016

% core

business

revenue

Q1 2015

% core

business

revenue

Core Business Revenue 82.896 100% 57.091 100% 25.805 45,2%

Other Revenue and Income 2.131 2.037 94 4,6%

TOTAL REVENUE 85.027 59.128 25.899 43,8%

TOTAL OPERATING COSTS (73.157) -88,3% (50.612) -88,7% (22.545) 44,5%

EBITDA 11.870 14,3% 8.516 14,9% 3.354 39,4%

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (3.290) -4,0% (1.952) -3,4% (1.338) 68,5%

EBIT 8.580 10,3% 6.564 11,5% 2.016 30,7%

NET FINANCIAL CHARGES (1.217) -1,5% (634) -1,1% (583) 91,9%

PRE-TAX PROFIT 7.363 8,9% 5.930 10,4% 1.433 24,2%

TOTAL INCOME TAXES (2.707) -3,3% (1.739) -3,0% (968) 55,7%

NET PROFIT - CONTINUING OPERATIONS 4.656 5,6% 4.191 7,3% 465 11,1%

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0 0,0% (118) -0,2% 118 -100,0%

NET PROFIT 4.656 5,6% 4.073 7,1% 583 14,3%

Non-controlling interest profit 346 0,4% 79 0,1% 267 338,0%

F.I.L.A. GROUP NET PROFIT 4.310 5,2% 3.994 7,0% 316 7,9%

Change 2016 - 2015

The principal changes compared to Q1 2015 are illustrated below.

“Core Business Revenue” of Euro 82,896 thousand increased on 2015 by Euro 25,805

thousand (+45.2%).

Considering exchange losses of approx. Euro 2,415 thousand (principally on the Mexican

Peso) and the M&A effect of approx. Euro 21,319 thousand from the above-stated acquisition

of the Daler & Rowney Lucas Group and from the full consolidation of Writefine Products

Private Limited (India), organic revenue growth was 12.1%.

This follows improved order fulfilment times, strong school and arts and craft product

demand and the continued consolidation of market share, principally in Central-South

America (+26%), in Europe (+9%) and in North America (+8%).

Other Revenue and Income of Euro 2,131 thousand increased on the previous year Euro 94

thousand, exclusively due to the consolidation of the Daler & Rowney Lucas Group.

“Operating Costs” of Euro 73,157 thousand increased Euro 22,545 thousand on 2015,

principally due to the consolidation of the Daler & Rowney Lukas Group and of Writefine

Products Private Limited (India). Net of these M&A operations, operating costs were

substantially in line with the preceding quarter, with the increase on the basis of higher sales

volumes offset, in addition to the weakening of the Mexican and Chinese currencies, also by

improved production efficiency at the Chinese and Mexican facilities.


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“EBITDA” in Q1 2016 amounts to Euro 11,870 thousand, improving therefore Euro 3,354

thousand on Q1 2015 (+39.4%). Excluding the above-stated M&A effect for approx. Euro

2,198 thousand and the main currency effects, “EBITDA” grew 15.8%, more than

proportional than organic revenue growth.

“EBIT” of Euro 8,580 thousand includes higher amortisation, depreciation and write-downs

than the previous year, principally due to increased amortisation and depreciation related to

the consolidation of the Daler & Rowney Lucas Group and of Writefine Products Private

Limited (India) for Euro 1,645 thousand, in addition to capex (in particular at the Mexican

facility).

“Net financial charges” in 2016 increased Euro 583 thousand, principally due to the presence

in 2015 of income from the valuation at equity of Writefine Products Private Limited (India),

fully consolidated from November 2015.

Group “Income taxes” amounted to Euro 2,707 thousand, increasing Euro 967 thousand on

the comparative period. Excluding the M&A effect, principally relating to Writefine

Products Private Limited (India), the tax rate reduced slightly on the first quarter of 2015.

Consequently, the normalised “Net Profit” in 2016 totalled Euro 4,656 thousand, up Euro 583

thousand on Q1 2015.

Excluding the non-controlling interest result, the F.I.L.A. Group normalised net profit in

2016 was Euro 4,310 thousand, compared to Euro 3,994 thousand in the previous year.


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Statement of Financial Position

The F.I.L.A. Group key Statement of Financial Position accounts at March 31, 2016 are

reported below.

Euro thousandsMarch 2016 December 2015

Change

2016 - 2015

Intangible assets 156,023 88,156 67,867

Property, plant & equipment 58,862 47,901 10,961

Financial assets 2,661 1,785 876

NET FIXED ASSETS 217,546 137,842 79,704

OTHER NON-CURRENT ASSETS/LIABILITIES 15,409 13,901 1,508

Inventories 155,658 118,519 37,139

Trade and Other Receivables 114,327 77,731 36,596

Other Current Assets 5,852 5,020 832

Trade and Other Payables (73,106) (52,985) (20,121)

Other Current Liabilities (3,692) (1,840) (1,853)

NET WORKING CAPITAL 199,039 146,445 52,594

PROVISIONS (38,488) (26,213) (12,275)

ASSETS/LIABILITIES OF DISCONTINUED OPERATIONS 0 0 0

NET CAPITAL EMPLOYED 393,506 271,975 121,532

EQUITY (227,162) (211,727) (15,435)

NET FINANCIAL INSTRUMENTS 0 (21,504) 21,504

NET FINANCIAL POSITION (166,344) (38,744) (127,600)

NET FUNDING SOURCES (393,506) (271,975) (121,531)

The “Net Capital Employed” of the F.I.L.A. Group at March 31, 2016 of Euro 393,506

thousand is principally comprised “Net Fixed Assets” of Euro 217,546 thousand (increasing

on December 31, 2015 Euro 79,704 thousand) and the “Net Working Capital” totalling Euro

199,039 (increasing on December 31, 2015 Euro 52,594 thousand).

The change in “Net Fixed Assets” was Euro 79,704 thousand, principally due to the increase

in Intangible Assets (Euro 67,867 thousand) and Property, plant and equipment (Euro 10,961

thousand).

The increase in Intangible assets stems from the consolidation effects of the Daler-Rowney

Lukas Group on the basis of the increased value of Brands of Euro 40,223 thousand and of

Know-How of Euro 30,532 thousand, due to the allocation of the positive differential

between the acquisition price and the book equity of the English group. The Goodwill from

the operation recognised to the consolidated financial statements at March 31, 2016 was Euro

3,520 thousand. The increases described were partially offset by negative currency effects of

Euro 5,282 thousand and amortisation and depreciation of Euro 1,219 thousand.


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Similarly, the increase in Property, plant and equipment (Euro 10,961 thousand) is principally

due to the consolidation of the Daler-Rowney Lukas Group, with the contribution of a net

carrying amount of Euro 12,839. Excluding the effects from the change in the consolidation

scope, the investments carried out by other Group companies totalled Euro 1,941 thousand

and principally related to F.I.L.A. S.p.A. (Italy), Fila Dixon Stationery (Kunshan) Co., Ltd.

(China) and Writefine Products Private Limited (India).

The account includes also depreciation of Euro 1,872 thousand and negative currency effects

of Euro 1,931 thousand.

The change in “Net Working Capital”, excluding the contribution of the Daler-Rowney

Lukas Group of Euro 25,494 thousand, amounted to Euro 27,100 and related to the

seasonality of the business, with an increase in inventory in the first quarter in support of the

upcoming schools campaign and an increase in receivables on the basis of the core business

sales cycle.

The change in F.I.L.A. Group “Equity” is principally due to the exercise of the residual

Market Warrants at December 31, 2015, exercised by January 4, 2016, resulting in an

increase in equity of Euro 21,444 thousand. The translation reserve had a negative impact of

Euro 5,816 thousand.

Following the conclusion of the Market Warrants exercise period, the “Net Financial

Instruments” account amounted to zero, which at December 31, 2015 amounted to Euro

21,504 thousand. The effect of the conversion into shares resulted in a change to equity as

previously described of Euro 21,444 thousand; the residual non-exercised portion was

recognised to the income statement as financial income for Euro 60 thousand.

The F.I.L.A. Group “Net Financial Position” at December 31, 2016 was a net debt of Euro

166,344 thousand, increasing Euro 127,600 thousand on December 31, 2015. For further

details on the movement of the net debt, reference should be made to the “Financial

overview” paragraph.


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Financial overview

The overview of the Q1 2016 Group operating and financial performance is completed by the

Statement of Cash Flow and Group Net Financial Position reported below.

Euro thousands March 2016 March 2015

EBIT 6,854 6,321

adjustments for non-cash items: 3,830 2,012

Amortisation & Depreciation 3,091 1,620

Write-down and Recovery in Value 6 13

Doubtful Debt Provision 193 320

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions 548 89

Gain/Loss on Fixed Asset Disposals (8) (29)

integrations for: (5,829) (1,939)

Income Taxes Paid (1,457) (1,960)

Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies (2,279) 696

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies (2,093) (675)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN NET

WORKING CAPITAL4,854 6,394

Changes in Net Working Capital: (31,656) (32,478)

Change in Inventories (16,977) (12,651)

Change in Trade and Other Receivables (22,690) (18,155)

Change in Trade and Other Payables 9,156 (1,500)

Change in Other Assets/Liabilities (1,061) (422)

Change in Post-Employment and Employee Benefits (85) 250

CASH FLOW FROM OPERATING ACTIVITIES (26,802) (26,084)

Total Investment/Divestment in Intangible Assets (47) (45)

Total Investment/Divestment in Property, Plant and Equipment (1,941) (2,292)

Total Investment/Divestment of Investments measured at Cost 0 (0)

Total Investment/Divestment in Other Financial Assets (287) (140)

Acquisition of investment in Daler & Rowney Lucas Group (16,751) 0

Interest Received 45 10

CASH FLOW FROM INVESTING ACTIVITIES (18,981) (2,303)

Total Change in Equity (490) 0

Interest Paid (1,042) (947)

Total Increase/Decrease Loans and Other Financial Liabilities 126,310 5,318

CASH FLOW FROM FINANCING ACTIVITIES 124,778 4,371

Translation difference (5,816) 7,364

Other non-cash equity changes 8,374 (6,285)

NET CASH FLOW IN THE PERIOD 81,553 (22,938)

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period 17,542 30,663

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period (change in

consolidation scope) (86,710) 0

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT END OF

THE PERIOD12,385 7,725

1) Cash and cash equivalents at March 31, 2016 totalled Euro 28,455 thousand; current account overdrafts

amounted to Euro 16,070 thousand net of relative interest.

2) Cash and cash equivalents at December 31, 2015 totalled Euro 30,683 thousand; current account overdrafts


3) The cash flows are presented using the indirect method. In order to provide a more complete and accurate

presentation of the individual cash flows, the effects from non-cash operations were eliminated (including the

conversion of statement of financial position items in currencies other than the Euro), where significant. These

effects were aggregated and included in the account “Other non-cash changes”.


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Euro thousands March 2016 December 2015

OPENING CASH AND CASH EQUIVALENTS 17,542 30,663

Cash and cash equivalents 30,683 32,473

Bank overdrafts (13,141) (1,810)

CLOSING CASH AND CASH EQUIVALENTS 12,385 17,542



The net cash flow absorbed in 2016 from “Operating Activities” of Euro 26,802 thousand

(absorption of operating cash at March 31, 2015 of Euro 26,084 thousand) concerns:

for Euro 4,854 thousand (Euro 6,394 thousand at March 31, 2015) cash flow generated

from “Operating Activities”, based on the difference of the “Value” and the “Costs of

Cash Generation” and the remaining ordinary income components, excluding financial

management;

for a negative Euro 31,656 thousand (Euro 32,478 thousand at March 31, 2015) from

movements in “Net Working Capital Management”, principally due to:

o the increase in inventories, in particular at Dixon Ticonderoga Company (U.S.A.),

Grupo F.I.L.A. – Dixon, S.A. de C.V. (Mexico), Dixon Ticonderoga Inc.

(Canada), Lyra KG (Germany), Omyacolor S.A. (France) and F.I.L.A. S.p.A.

(Italy), in support of future sales and the prompt execution of orders;

o the increase in “Trade and Other Receivables”, due both to business seasonality

and the increase in Group revenue, in particular at F.I.L.A. S.p.A. (Italy), in Dixon

Ticonderoga Company (U.S.A.), in addition to Grupo F.I.L.A. – Dixon, S.A. de

C.V. (Mexico), Omyacolor S.A. (France) and F.I.L.A. Chile Ltda (Chile);

o the increase in trade payables, principally at Dixon Ticonderoga Company

(U.S.A.) and Grupo F.I.L.A. – Dixon, S.A. de C.V. (Mexico), for increased

purchases in the period, principally related to the increase in inventories;

“Investing Activities” absorbed liquidity of Euro 18,981 thousand (Euro 2,303 thousand

in Q1 2015), of which:


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o Euro 47 thousand (Euro 45 thousand in Q1 2015) almost exclusively concerning

the renewal of concessions and trademarks by F.I.L.A. S.p.A;

o Euro 1,941 thousand (Euro 2,292 thousand in Q1 2015) for net investment in plant

and machinery, principally by Fila Dixon Stationery (Kunshan) Co., Ltd. (China),

F.I.L.A. S.p.A. (Italy) and Writefine Products Private Limited (India);

o Euro 16,751 thousand (Euro 0 thousand in Q1 2015) for the recognition of the

investment in the Daler & Rowney Lucas Group.

“Financing Activities” generated net cash of Euro 124,778 thousand (generating cash of Euro

4,371 thousand in Q1 2015), principally concerning:

the decrease of equity of Euro 490 thousand (Euro 0 thousand in Q1 2015), concerning

the non-controlling interest share of dividends distributed by Writefine Products Private

Limited (India);

the absorption of Euro 1,042 thousand (Euro 947 thousand in Q1 2015) from interest

charges paid on loans and credit lines granted to Group companies, principally F.I.L.A.

S.p.A. (Italy), Dixon Ticonderoga Company (U.S.A.), Grupo F.I.L.A. –Dixon, S.A. de

C.V. (Mexico) and Fila Dixon Stationery (Kunshan) Co., Ltd. (China);

the generation of Euro 126,310 thousand, principally due to the bank loan issued for the

acquisition of the Daler & Rowney Lucas Group.

The translation difference, of Euro 5,816 thousand, concerns the conversion of Group

companies financial statements from local currency to the consolidation currency (the Euro)

and the other non-cash increases for Euro 8,374 thousand, principally due to the exchange

rate movements on the previous year concerning the other larger balance sheet items. The

total net cash generated in the period was therefore Euro 81,553 thousand (absorption of Euro

22,938 thousand in Q1 2015).


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The “Net Cash Available” at the beginning in the period was therefore Euro 17,542 thousand

and at period end was Euro 12,385 thousand.

The Net Financial Position at March 31, 2016 reports a debt of Euro 166,344 thousand.

Euro thousands March 31, 2016 December 31, 2015 Change in period

A Cash 161 132 29

B Other cash equivalents 28,294 30,551 (2,257)

C Securities held-for-trading

D Liquidity ( A + B + C) 28,455 30,683 (2,228)

E Current financial receivables 1,161 268 893

F Current bank payables (80,740) (67,319) (13,421)

G Current portion of non-current debt (12,897) (715) (12,182)

H Other current financial payables (2,677) (505) (2,172)

I Current financial debt ( F + G + H ) (96,315) (68,539) (27,776)

J Net current financial debt (I + E+ D) (66,698) (37,588) (29,110)

K Non-current bank payables (99,894) (1,404) (98,490)

L Bonds issued 0 0 0

M Other non-current payables (110) (106) (4)

N Non-current financial debt ( K + L + M ) (100,003) (1,510) (98,493)

O Net financial debt (J+N) (166,702) (39,098) (127,604)

P Loans issued to third parties 357 354 3

Q Net financial debt (O + P) - F.I.L.A. Group (166,344) (38,744) (127,600)

Compared to December 31, 2015 (debt of Euro 38,744 thousand), net debt increased Euro

127,600 thousand. Excluding the net debt of the Daler-Rowney Lucas Group at the

acquisition date of Euro 86,752 thousand and the currency effect from the transaction of the

net financial position items in currencies other than the Euro, contributing cash of Euro 1,401

thousand, the increase in the net debt for Euro 42,250 thousand (compared to a cash

absorption of Euro 28,107 thousand in the first quarter of 2015 excluding the net financial

positions of the companies acquired in the year and the currency effect) is principally due to:


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net cash absorbed from operating activities of Euro 26,802 thousand (Euro 26,084

thousand in Q1 2015), mainly owing to the increase in trade receivables, both due to

business seasonality and the significant increase in Group revenue, the higher

inventories to support future sales and the prompt execution of orders, offset by the

increase in trade payables, principally at Dixon Ticonderoga Company (U.S.A.) and

Grupo F.I.L.A. –Dixon, S.A. de C.V. (Mexico) for increased purchases in the period;

the absorption of cash with a recognition of the investment in the Daler-Rowney

Lucas Group of Euro 16,751 thousand, of which Euro 1,084 thousand consultancy on

the corporate operations;

net tangible and intangible asset investment of Euro 1,988 thousand (Euro 2,337

thousand in Q1 2015);

cash absorbed from interest on loans and credit lines issued to Group companies of

Euro 1,042 thousand (Euro 947 thousand in Q1 2015);


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Disclosure by operating segment

In terms of segment reporting, the F.I.L.A. Group has adopted IFRS 8, obligatory from

January 1, 2009.

IFRS 8 requires an entity to base segment reporting on internal reporting, which is constantly

reviewed by the highest level of management in order to allocate resources to the various

segments and to analyse performance.

Geographic region is the primary basis of analysis and of decision-making by F.I.L.A. Group

Management, therefore fully in line with the internal reporting prepared for these purposes.

The products of the F.I.L.A. Group are similar in terms of quality and production, target

market, margins, sales network and clients, even with reference to the different brands which

the Group markets. No diversification is therefore deemed to be present within the Segment,

in consideration of the substantial uniformity of the risks and benefits relating to the products

produced by the F.I.L.A. Group.

The segment disclosure accounting standards are in line with those utilised for the

consolidated financial statements.

Segment disclosure was therefore based on the location of operations (“Entity Locations”),

broken down as follows: “Europe”, “North America”, “Central and South America” and

“Rest of the World”. The “Rest of the World” includes the subsidiaries in South Africa and

Australia.

The “Business Segment Reporting” of the F.I.L.A. Group aggregates companies by region on

the basis of the “operating location”.

The association between the regions, reported in the “Business Segment Reporting” and the

F.I.L.A. Group companies was as follows:


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Europe

F.I.L.A. S.p.A. (Italy)

Omyacolor S.A. (France)

F.I.L.A. Hispania S.L. (Spain)

FILALYRA GB Ltd. (United Kingdom)

Johann Froescheis Lyra Bleistift-Fabrik GmbH & Co. KG (Germany)

Lyra Bleistift-Fabrik Verwaltungs GmbH (Germany)

Lyra Scandinavia AB (Sweden)

FILA Stationary and Office Equipment Industry Ltd. Co. (Turkey)

Fila Stationary O.O.O. (Russia)

Industria Maimeri S.p.A. (Italy)

Fila Hellas SA (Greece)

Fila Polska Sp. Z.o.o (Poland)

Renoir Topco Ltd (United Kingdom)

Renoir Midco Ltd (United Kingdom)

Renoir Bidco Ltd (United Kingdom)

Daler Rowney Group Ltd (United Kingdom)

Daler Rowney S.A. (Belgium)

Daler Rowney Ltd (United Kingdom)

Longbeach Arts Ltd (United Kingdom)

Daler Board Company Ltd (United Kingdom)

Daler Holdings Ltd (United Kingdom)

Daler Designs Ltd (United Kingdom)

Daler Rowney GmbH (Germany)

Lukas-Nerchau GmbH (Germany)

Nerchauer Malfarben GmbH (Germany)

Lastmill Ltd (United Kingdom)

Rowney & Company Pencils Ltd (United Kingdom)

Rowney (Artists Brushes) Ltd (United Kingdom)

North America

Dixon Ticonderoga Company (U.S.A.)

Dixon Ticonderoga Inc. (Canada)

Daler Rowney USA Ltd (U.S.A.)

Central - South America

Grupo F.I.L.A.-Dixon, S.A. de C.V. (Mexico)

F.I.L.A. Chile Ltda (Chile)

FILA Argentina S.A. (Argentina)

Licyn Mercantil Industrial Ltda (Brazil)

Brideshore srl (Dominican Republic)

Asia

Beijing F.I.L.A.-Dixon Stationery Company Ltd. (China)

Xinjiang F.I.L.A.-Dixon Plantation Company Ltd. (China)

Fila Dixon Art & Craft Yixing Co.,Ltd (China)

PT. Lyra Akrelux (Indonesia)

Lyra Asia PTE Ltd. (Singapore)

FILA Dixon Stationery (Kunshan) Co., Ltd. (China)

Writefine Products PVT LTD (India)

Rest of the World

FILA Australia PTY LTD (Australia)

FILA Cartorama SA PTY LTD (South Africa)

The segment reporting required in accordance with IFRS 8 is presented below.


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For the purposes of providing comparable financial statements, the figures are shown net of

the change in the consolidation scope during 2016 following the acquisition of the companies

of the Daler-Rowney Lukas Group. In addition, in relation to the comparison of the income

statement, the first quarter 2016 figures exclude also the contribution of Writefine Products

Private Limited, consolidated from November 2015.

Business Segments – Statement of Financial Position

The F.I.L.A. Group “statement of financial position” by region at March 31, 2016 and

December 31, 2015 is reported below:

Euro thousands EuropeNorth

America

Cen. - South

AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

March 2016

STATEMENT OF FINANCIAL POSITION

Non-Current Assets 116,765 12,846 13,997 90,699 178 (1,072) 233,413 of which Intercompany (1,829) 757

Intangible Assets 78,804 5,838 5,003 66,343 111 (76) 156,023Property, Plant and Equipment 26,400 1,943 7,107 23,351 61 58,862Non-Current Financial Assets 4,280 466 321 554 6 (2,945) 2,682Investments measured at Equity 308 308Investments measured at Cost 31 31Deferred Tax Assets 7,250 4,599 1,566 143 1,949 15,507

Current Assets 335,345 80,988 92,585 44,514 1,309 (249,288) 305,453 of which Intercompany (224,524) (4,123) (6,730) (13,911)

Current Financial Assets 93,883 2,212 118 859 (95,911) 1,161Current Tax Receivables 2,450 1,524 455 1,423 5,852

Inventories 65,113 43,678 32,747 20,157 1,016 (7,053) 155,658

Trade and Other Receivables 163,841 23,127 56,445 17,349 184 (146,619) 114,327

Cash and Cash Equivalents 10,058 10,447 2,820 4,726 109 295 28,455

TOTAL ASSETS 452,110 93,834 106,582 135,213 1,488 (250,360) 538,866

of which Intercompany (226,353) (3,366) (6,730) (13,911)

Non-Current Liabilities 120,632 3,229 2,225 14,281 (2,820) 137,547

of which Intercompany (1,820) (1,000)

Non-Current Financial Liabilities 100,986 28 1,027 907 (2,945) 100,003

Employee Benefits 3,518 733 737 337 5,325

Provisions for Risks and Charges 592 306 898

Deferred Tax Liabilities 15,536 2,162 461 12,937 125 31,221

Other Payables 100 100

Current Liabilities 284,400 43,714 55,118 30,713 2,489 (242,279) 174,157213,515 4,886 9,203 12,304 2,371 of which Intercompany (213,515) (4,886) (9,203) (12,304) (2,371)

Current Financial Liabilities 126,662 17,921 35,229 9,375 1,065 (93,937) 96,315

Financial Instruments

Provisions for Risks and Charges 956 88 1,044

Current Tax Payables 684 907 457 1,644 3,692

Trade and Other Payables 156,100 24,798 19,432 19,694 1,424 (148,342) 73,106

TOTAL LIABILITIES 405,034 46,943 57,343 44,994 2,489 (245,099) 311,704

of which Intercompany (215,335) (4,886) (10,203) (12,304) (2,371)

* Allocation by "Entity Location"

REPORTING FORMAT - BUSINESS SEGMENTS*

Goegraphic Area - F.I.L.A. Group


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America

Cen. - South

AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

December 2015


Non-Current Assets 34,564 10,015 15,456 93,693 180 (1,679) 152,229

of which Intercompany (2,108) 578 (148)

Intangible Assets 8,383 4,251 7,089 68,545 112 (224) 88,156

Property, Plant and Equipment 16,014 1,233 6,412 24,178 64 47,901

Non-Current Financial Assets 3,425 497 334 472 4 (2,945) 1,787

Investments measured at Equity 322 322

Investments measured at Cost 31 31

Deferred Tax Assets 6,711 4,034 1,621 176 1,490 14,032

Current Assets 103,815 49,667 66,930 45,805 1,423 (35,419) 232,221

of which Intercompany (16,206) (3,728) (2,946) (12,536) (3)

Current Financial Assets 4,146 215 881 (4,974) 268

Current Tax Receivables 2,186 1,517 289 1,028 5,020

Inventories 49,134 24,804 26,285 22,118 925 (4,747) 118,519



TOTAL ASSETS 138,379 59,682 82,386 139,498 1,603 (37,098) 384,450

of which Intercompany (18,315) (3,150) (2,946) (12,684) (3)








Current Liabilities 77,788 21,427 42,081 32,172 2,506 (30,672) 145,302

of which Intercompany (7,696) (453) (9,167) (11,100) (2,255)


Financial Instruments 21,504 21,504





of which Intercompany (9,516) (453) (10,167) (11,100) (2,255)





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For a better understanding of the changes between the comparative periods, the F.I.L.A.

Group Business Segments at March 2016 at like-for-like consolidation scope with 2015 are

reported below.


America

Central -

South AmericaAsia

Rest of the

WorldConsolidation

F.I.L.A.

Group

March 2016 - LIKE-FOR-LIKE CONSOLIDATION SCOPE


Non-Current Assets 33,899 11,312 12,998 90,699 178 (1,307) 147,778

of which Intercompany (2,064) 757

Intangible Assets 8,295 5,838 5,003 66,343 111 (76) 85,514

Property, Plant and Equipment 16,013 1,148 6,108 23,351 61 46,681

Non-Current Financial Assets 3,423 466 321 554 6 (2,945) 1,825

Investments measured at Equity 308 308

Investments measured at Cost 31 31

Deferred Tax Assets 6,136 3,860 1,566 143 1,714 13,418

Current Assets 207,313 63,145 77,286 44,514 1,309 (41,650) 351,909


Current Financial Assets 90,970 (1) 118 859 (2,663) 89,284

Current Tax Receivables 2,405 1,524 455 1,423 5,806

Inventories 52,488 35,507 28,096 20,157 1,016 (5,489) 131,777



TOTAL ASSETS 241,211 74,456 90,285 135,213 1,488 (42,957) 499,686









Current Liabilities 78,194 34,392 52,734 30,713 2,489 (36,161) 162,297












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Business Segments – Income Statement

The “income statement” for the F.I.L.A. Group by region for Q1 2016 and Q1 2015 is

reported below:


America

Cen. - South

AmericaAsia

Rest of the

WorldConsolidation F.I.L.A. Group

Q1 2016

INCOME STATEMENT

Core Business Revenue 53.038 20.998 19.809 21.194 127 (32.270) 82.896

Other Revenue and Income 2.181 583 418 219 8 (1.278) 2.131

TOTAL REVENUE 55.219 21.581 20.227 21.413 135 (33.548) 85.027

of which Intercompany (13.830) (729) (8.990) (9.999)

Raw Materials, Ancillary, Consumables and Goods (31.519) (26.003) (13.519) (11.672) (160) 32.207 (50.666)

Services and Rent, Leases and Similar Costs (11.997) (4.224) (3.519) (2.388) (76) 370 (21.834)

Other Operating Costs (795) (562) (945) (121) (21) (72) (2.516)

Change in Inventory 3.483 13.371 2.782 (1.081) 79 (1.198) 17.436

Labour Costs (9.553) (1.645) (3.006) (3.054) (46) (17.304)

TOTAL OPERATING COSTS (50.381) (19.063) (18.207) (18.316) (224) 31.307 (74.884)

of which Intercompany 19.354 7.947 1.948 1.896 162

EBITDA 4.838 2.518 2.020 3.097 (89) (2.241) 10.143

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (1.520) (207) (476) (1.082) (5) (3.290)

EBIT 3.318 2.311 1.544 2.015 (94) (2.241) 6.853

Interest and Income from Group Companies 450 (449) 0

Interest on Bank Deposits 12 1 1 32 46

Interest Income 461 1 1 32 (449) 47

Dividends 513 (513) 0

Other Financial Income 813 5 818

Unrealised Exchange Gains on Financial Transactions 122 227 15 4 368

Realised Exchange Gains on Financial Transactions 3 3

Other Financial Income 1.448 235 15 (509) 1.189

Interest and charges from Group Companies (436) (18) (5) 459 1

Interest on Bank Overdrafts (44) () (5) () (50)

Interest on Bank Loans (307) (84) (471) (141) (1.003)

Interest to Other Lenders () (2) (1) (3)

Interest Expense (787) (84) (494) (143) (6) 459 (1.055)

Other Financial Charges (269) (5) (13) (8) (295)

Unrealised Exchange Losses on Financial Transactions (4.000) (169) (1) (14) (4.184)

Realised Exchange Losses on Financial Transactions (10) (1) (11)

Other Financial Charges (4.279) (5) (183) (8) (1) (14) (4.490)

Income/Charges from Investments at Equity

NET FINANCIAL INCOME/(CHARGES) (3.156) (88) (441) (119) 8 (513) (4.309)

of which Intercompany (537) 19 5

PRE-TAX PROFIT/(LOSS) 162 2.223 1.103 1.896 (86) (2.754) 2.544

TOTAL INCOME TAXES (1.003) (908) (307) (527) 259 (2.486)

of which Intercompany 48 211

NET PROFIT/(LOSS) - CONTINUING OPERATIONS (841) 1.315 796 1.369 (86) (2.495) 58

NET PROFIT - DISCONTINUED OPERATIONS

NET PROFIT/(LOSS) (841) 1.315 796 1.369 (86) (2.495) 58

Non-controlling interest profit/(loss) 61 293 (8) 346

F.I.L.A. GROUP NET PROFIT/(LOSS) (902) 1.315 796 1.076 (78) (2.495) (288)



Geographic Area - F.I.L.A. Group


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America

Cen. - South

AmericaAsia

Rest of the


Q1 2015

INCOME STATEMENT



TOTAL REVENUE 38.632 15.565 17.068 9.504 142 (21.783) 59.128

of which Intercompany (6.526) (788) (5.670) (8.800) 1


Services and Rent, Leases and Similar Costs (8.835) (3.062) (3.331) (1.084) (61) 1.576 (14.797)


Change in Inventory 4.544 7.283 2.166 (657) 96 (646) 12.786

Labour Costs (6.865) (1.371) (2.890) (2.110) (65) (13.301)



EBITDA 5.107 2.177 1.054 639 (57) (647) 8.273

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (1.187) (125) (432) (204) (4) (1.952)

EBIT 3.920 2.052 622 435 (61) (647) 6.321

Interest and Income from Group Companies 13 (12) 1

Interest on Bank Deposits 4 2 1 7

Interest Income 17 2 1 (12) 8

Dividends

Other Financial Income 3 21 7 32

Unrealised Exchange Gains on Financial Transactions 216 10 226

Realised Exchange Gains on Financial Transactions 11 11

Revaluations of Investments at Cost 8 (8)

Other Financial Income 238 21 17 (8) 268

Interest and charges from Group Companies (8) (3) (2) 13

Interest on Bank Overdrafts (49) (5) (54)

Interest on Bank Loans (174) (93) (455) (89) (811)

Interest to Other Lenders (1) (1)

Interest Expense (231) (94) (458) (94) (2) 13 (866)

Other Financial Charges (124) (9) 1 (132)

Unrealised Exchange Losses on Financial Transactions (87) (17) () (104)

Realised Exchange Losses on Financial Transactions (3) (21) (24)

Other Financial Charges (214) (47) 1 () (260)

Income/Charges from Investments at Equity 216 216

NET FINANCIAL INCOME/(CHARGES) (190) (71) (488) (92) (2) 209 (634)

of which Intercompany 202 5 2

PRE-TAX PROFIT/(LOSS) 3.730 1.981 134 343 (63) (438) 5.687

TOTAL INCOME TAXES (860) (727) (246) 171 (1.662)


NET PROFIT/(LOSS) - CONTINUING OPERATIONS 2.870 1.254 (112) 343 (63) (267) 4.025

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 2 (120) (118)

NET PROFIT/(LOSS) 2.870 1.256 (112) 223 (63) (267) 3.906

Non-controlling interest profit/(loss) 101 1 8 (31) 79

FILA GROUP NET PROFIT/(LOSS) 2.769 1.255 (112) 215 (32) (267) 3.827



Geographic Area - F.I.L.A Group


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For a better understanding of the changes between the comparative periods, the F.I.L.A.

Group Business Segments for Q1 2016 at like-for-like consolidation scope with Q1 2015 are

reported below.


America

Central -

South

America

AsiaRest of the


Q1 16 - LIKE-FOR-LIKE CONSOLIDATION SCOPE

INCOME STATEMENT



TOTAL REVENUE 42.254 17.003 17.576 9.167 135 (23.362) 62.773

of which Intercompany (7.767) (729) (6.345) (8.521)


Services and Rent, Leases and Similar Costs (9.870) (3.635) (3.319) (979) (76) 369 (17.510)


Change in Inventory 3.363 12.016 2.579 181 79 (830) 17.387

Labour Costs (7.460) (1.348) (2.690) (1.554) (46) (13.098)



EBITDA 4.522 2.627 1.481 1.321 (89) (1.914) 7.945

AMORTISATION, DEPRECIATION AND WRITE-DOWNS (899) (125) (432) (179) (5) (1.640)

EBIT 3.622 2.501 1.047 1.143 (94) (1.914) 6.305

Interest and Income from Group Companies 27 (27) ()

Interest on Bank Deposits 8 1 1 1 10

Interest Income 34 1 1 1 (27) 10

Dividends 513 (513) 0

Other Financial Income 813 5 818

Unrealised Exchange Gains on Financial Transactions 122 227 15 4 368

Other Financial Income 1.448 232 15 (509) 1.186

Interest and charges from Group Companies (13) (18) (5) 36

Interest on Bank Overdrafts (44) (5) () (50)

Interest on Bank Loans (307) (84) (471) (70) (931)

Interest to Other Lenders () (1) (1)

Interest Expense (364) (84) (494) (70) (6) 36 (982)

Other Financial Charges (269) (13) (283)

Unrealised Exchange Losses on Financial Transactions (3.978) (165) (1) (14) (4.158)

Realised Exchange Losses on Financial Transactions (5) (5)

Other Financial Charges (4.252) (178) (1) (14) (4.445)

NET FINANCIAL INCOME/(CHARGES) (3.134) (83) (439) (69) 8 (514) (4.231)

of which Intercompany (538) 19 5

PRE-TAX PROFIT/(LOSS) 488 2.418 608 1.074 (86) (2.429) 2.074

TOTAL INCOME TAXES (1.087) (876) (307) (218) 256 (2.232)


NET PROFIT/(LOSS) - CONTINUING OPERATIONS (599) 1.542 301 856 (86) (2.173) (158)

NET PROFIT - DISCONTINUED OPERATIONS

of which Intercompany

NET PROFIT/(LOSS) (599) 1.542 301 856 (86) (2.173) (158)

Non-controlling interest profit/(loss) 61 (8) 53

F.I.L.A. GROUP NET PROFIT/(LOSS) (660) 1.542 301 856 (78) (2.173) (210)





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Business Segments – Other Information

The “other information”, concerning tangible and intangible fixed asset investments of Group

companies by region for March 31, 2016 and March 31, 2015 is reported below:

Euro thousands Europe North AmericaCen. - South

AmericaAsia

Rest of the

World

F.I.L.A.

Group

March 2016

OTHER INFORMATION

Investments

Intangible assets 47 47

Property, Plant and Equipment 812 55 229 844 1 1,941

TOTAL INVESTMENTS 859 55 229 845 1 1,988




Euro thousands Europe North AmericaCen. - South

AmericaAsia

Rest of the

World

F.I.L.A.

Group

March 2015

OTHER INFORMATION

Investments

Intangible assets 45 45

Property, Plant and Equipment 1,081 23 877 283 29 2,292

TOTAL INVESTMENTS 1,126 23 877 283 29 2,337





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Business seasonality

The Group’s operations are affected by business seasonality, as reflected also in the

consolidated results.

The breakdown of the income statement by quarter highlights the concentration of sales in the

second and third quarters for the “schools’ campaign”. Specifically, in June significant sales

are made through the “school suppliers” traditional channel and in August through the

“retailers” channel.

The key quarterly figures of 2015 and 2016 are reported below.

2016 2016

Euro thousandsFirst 3 mth.

2015

First 6 mth.

2015

First 9 mth.

2015FY 2015

First 3 mth.

2016

First 3 mth.

2016LIKE-FO R-LIKE

SCO PE(1)

Core Business Revenue 57,091 141,520 217,794 275,333 82,896 61,578

Full year portion 20.74% 51.40% 79.10% 100.00% 100.00% 100.00%

EBITDA 8,273 25,973 37,936 41,780 10,143 7,945

% on core business revenue 14.49% 18.35% 17.42% 15.17% 12.24% 12.90%


EBIT 6,321 21,800 32,051 33,999 6,853 6,305



Normalised EBITDA 8,516 27,860 40,938 47,622 11,870 9,672



Group Net Profit/(loss) 3,827 (34,348) (28,230) (16,663) (288) (210)

% on core business revenue 6.70% -24.27% -12.96% -6.05% -0.35% -0.34%

Full year portion -22.97% 206.14% 169.42% 100.00% 100.00% 100.00%

Net Financial Position (91,369) (55,632) (30,131) (38,744) (166,344) NA

2015

(1)First 3 months 2016 at like-for-like consolidation scope. Figures net of the contribution of the Daler-Rowney Lukas Group and Wrtiefine Products

Private Limited


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Business Combinations

Daler-Rowney Lukas Group

On February 3, 2016, F.I.L.A. S.p.A. acquired 100% of the entire share capital - comprising

“ordinary shares” and “preference shares” - of Renoir TopCo Ltd, the holding company of

the Daler-Rowney Lukas Group, from the private equity fund Electra Partners LLP and the

management team of Daler-Rowney.

From February 3, 2016, the companies of the English Group were consolidated in the

financial statements of the F.I.L.A. S.p.A. Group under the “line by line” method and at

March 31, 2016 contributed to the result only the profits/loss for the period between February

3, 2016 and March 31, 2016.

The cash flows utilised for the acquisition of 100% of Renoir TopCo Ltd, the parent company

of the Daler & Rowney Lucas Group, are illustrated below:

(58,065)

Fair Value of acquisition of Daler & Rowney Lukas Group at February 3, 2016 12,147

4,222

15,667

11,445

Net Acquisition Carrying Amount of Daler & Rowney Lukas Group at February 3, 2016

Cash and cash equivalents Acquired I)

Price paid by F.I.L.A. S.p.A. II)

Cash Flow employed for acquisition of Daler & Rowney Lukas Group at February 3, 2016 II) - I)


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The allocation of the differential between the “Investment Cost” and the “Net Carrying Value”

of the Daler-Rowney Lukas Group is reported below.

Through application of the PPA method, the principal value generating assets were identified

and valued; the estimated Goodwill was therefore the residual value deriving from the

allocation of the price differential to the Group’s assets:

Total Payment of F.I.L.A. S.p.A. for Daler & Rowney Lukas Group A 15,667

Total Consultancy Charges of F.I.L.A. S.p.A. for Daler & Rowney Lukas Group B 1,084

Value of F.I.L.A. S.p.A Investment in Daler & Rowney Lukas Group in the separate financial statements of the parent A + B16,751

Value of Equity of Daler & Rowney Lukas Group at February 3, 2016 held by F.I.L.A S.p.A. F (58,065)

Allocation of the differential between the Investment Cost and the Net Carrying Amount of the Daler-Rowney Lukas Group G 70,212

Intangible Assets - Brands 40,223

Intangible Assets - Know How 30,532

Intangible Assets - Local Goodwill (263)

Property, Plant and Equipment 836

Deferred Tax Assets 134

Current Tax Receivables 23

Inventories 151

Trade Payables & Receivables & Other Receivables & Payables (257)

Current Financial Liabilities 12,846

Provisions for risks and charges (653)

Deferred Tax Liabilities (13,359)

A - F - G 3,520 Differential between the purchase amount of the investment and the net carrying amount of the Daler-Rowney Lukas Group (Goodwill) at

February 3, 2016 Note: The figures are converted at the exchange rate at February 3, 2016.


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The value of the assets and liabilities of the Daler-Rowney Lukas Group at the acquisition

date was as follows:

Euro thousandsCarrying Amount

Fair Value

alignment - IFRS 3Fair Value

ASSETS 58.897 71.469 130.365

Non-Current Assets 14.993 71.461 86.454

Intangible Assets 292 70.492 70.784 I)

Property, Plant and Equipment 12.003 836 12.839 II)

Non-Current Financial Assets 589 0 589

Deferred Tax Assets 2.108 134 2.242 III)

Current Assets 43.904 7 43.911

Current Financial Assets 1.041 0 1.041

Current Tax Receivables 0 23 23 IV)

Inventories 23.368 151 23.520 V)

Trade and Other Receivables 16.314 (167) 16.147 II)

Cash and Cash Equivalents 3.181 0 3.181

Non-Current and Current Assets Held-for-Sale 0 0 0

LIABILITIES AND EQUITY 58.897 71.469 130.365

Equity (58.065) 70.212 12.147

Share Capital 20 0 20

Reserves (58.084) 70.212 12.127

Non-Current Liabilities 76 13.359 13.435

Non-Current Financial Liabilities 19 0 19

Employee Benefits 57 0 57

Deferred Tax Liabilities 0 13.359 13.359 III)

Current Liabilities 116.885 (12.102) 104.783

Current Financial Liabilities 103.801 (12.846) 90.955 VI)

Provisions for Risks and Charges 17 653 670 VII)

Current Tax Payables 82 0 82

Trade and Other Payables 12.985 90 13.075 VIII)

Non-Current and Current Liabilities Held-for-Sale 0 0 0

Note: The figures are converted at the exchange rate at February 3, 2016.

The principal adjustments made to the consolidated statement of financial position of the

Daler-Rowney Lukas Group are reported below:

I) Adjustment of the carrying amount of the “Intangible Assets” for a total amount

of Euro 70,492 thousand, allocated to the owned brands for Euro 40,223 thousand

and to “Know-How” for Euro 30,532 thousand, identified as a strategic asset in

application of the “purchase price allocation” method. The estimate of the Fair

value is based on an independent expert’s valuation. The residual of Euro 263

thousand is due to the net book value of the “local Goodwill” already recorded in

the separate financial statements of the company.


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II) The adjustment of the net carrying amount of “Property, Plant and Machinery”

amounts to Euro 836 thousand, principally attributable to the revaluation of assets

expressed at their fair value on the “Purchase Price Allocation” (Euro 699

thousand). The residual part of the change is due to a reclassification from Trade

Other Receivables to Plant and Machinery to ensure a better representation of

certain items (Euro 167 thousand).

III) The changes in the deferred tax assets and liabilities are entirely due to the fiscal

effects calculated on the adjustments made on assets and liabilities on the

“Purchase Price Allocation”.

IV) Current tax receivables were revised for a total of Euro 23 thousand against a

precise calculation of the Group tax charge at the acquisition date.

V) The adjustment of the value of inventories was Euro 151 thousand, representing

the estimate of the implied margin on stock in inventory at the acquisition date of

the Group. The application of the valuation model requires in fact an estimate of

the contribution in terms of future expected benefits from the production carried

out in the period before the acquisition.

VI) Current Financial Assets were impacted by a reclassification to Equity of

preference shares, locally recognised to financial liabilities and considered similar

to capital instruments (Euro 12,846 thousand).

VII) The Provisions for risks and charges were restated to an amount considered more

reflective of the risks underlying the open claims at a number of companies of the

Daler-Rowney Lukas Group.

VIII) The adjustment of Euro 90 thousand to Trade and Other Payables concerns the

adjustment to the value of employee vacations.


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The consolidated statement of financial position and income statement of the Daler-Rowney

Lukas Group at March 31, 2016 are reported below:

Euro thousands 31-03-2016

ASSETS 124.774

Non-Current Assets 82.115

Intangible Assets 66.989

Property, Plant and Equipment 12.181

Non-Current Financial Assets 857

Deferred Tax Assets 2.089

Current Assets 42.659

Current Financial Assets 991

Current Tax Receivables 46

Inventories 23.881

Trade and Other Receivables 14.959

Cash and Cash Equivalents 2.782

Non-Current and Current Assets Held-for-Sale 0

LIABILITIES AND EQUITY 124.774

Equity 11.139

Non-Current Liabilities 12.661

Non-Current Financial Liabilities 16

Employee Benefits 19

Deferred Tax Liabilities 12.625

Current Liabilities 100.975

Current Financial Liabilities 86.970

Provisions for Risks and Charges 614

Current Tax Payables 102

Trade and Other Payables 13.289

Non-Current and Current Liabilities Held-for-Sale 0


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Euro thousands 2016

Revenue from Sales and Service 10.625

Other Revenue and Income 863

TOTAL REVENUE 11.488

Raw Materials, Ancillary, Consumables and Goods (6.536)

Services and Rent, Leases and Similar Costs (2.914)

Other Operating Costs (220)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 1.311

Labour Costs (2.706)

Amortisation & Depreciation (742)

Write-downs (4)

TOTAL OPERATING COSTS (11.811)

EBIT (324)

Financial Income 7

Financial Charges (459)

NET FINANCIAL INCOME/(CHARGES) (452)

PRE-TAX PROFIT/(LOSS) (776)

Income Taxes (38)

Deferred Tax Income and Charges 92

TOTAL INCOME TAXES 54

NET PROFIT/(LOSS) - CONTINUING OPERATIONS (721)

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS (721)

NET PROFIT/(LOSS) (721)


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Subsequent events

There were no subsequent events after period-end.

Treasury shares

The parent F.I.L.A. S.p.A. did not hold treasury shares at March 31, 2016.

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II - Consolidated Financial Statements of the F.I.L.A. Group at March 31, 2016

Consolidated Financial Statements

Statement of Financial Position

Euro thousands March 31, 2016 December 31, 2015

ASSETS 538,866 384,450

Non-Current Assets 233,413 152,229

Intangible Assets 156,023

88,156

Property, Plant and Equipment 58,862

47,901

Non-Current Financial Assets 2,682

1,787

Investments Measured at Equity 308

322

Investments Measured at Cost 31

31

Deferred Tax Assets 15,507

14,032

Current Assets 305,453 232,221

Current Financial Assets 1,161 268

Current Tax Receivables 5,852 5,020 Inventories 155,658 118,519

Trade and Other Receivables 114,327 77,731 Cash and Cash Equivalents 28,455 30,683

Non-Current and Current Assets Held-for-Sale 0 0

LIABILITIES AND EQUITY 538,866 384,450

Equity 227,162 211,727

Share Capital 37,171 37,171 Reserves 39,179 80,828 Retained Earnings 128,301 86,424 Net Profit (288) (16,663) Group Equity 204,363 187,760

Non-controlling interest equity 22,799 23,967

Non-Current Liabilities 137,547 27,421

Non-Current Financial Liabilities 100,003

1,510 Employee Benefits 5,325

5,352

Provisions for Risks and Charges 898

942

Deferred Tax Liabilities 31,221

19,485 Other Payables 100

132

Current Liabilities 174,157 145,302

Current Financial Liabilities 96,315 68,539 Financial Instruments 0 21,504 Provisions for Risks and Charges 1,044 434

Current Tax Payables 3,692 1,840 Trade and Other Payables 73,106 52,985

Non-Current and Current Liabilities Held-for-Sale 0 0

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Statement of Comprehensive Income

Euro thousands Q1 2016 Q1 2015

Revenue from Sales and Service 82.896 57.091

Other Revenue and Income 2.131 2.037

TOTAL REVENUE 85.027 59.128

Raw Materials, Ancillary, Consumables and Goods (50.666) (33.484)

Services and Rent, Leases and Similar Costs (21.834) (14.797)

Other Operating Costs (2.516) (2.059)

Change in Raw Materials, Semi-Finished, Work-in-progress and Finished Products 17.436 12.786

Labour Costs (17.304) (13.301)

Amortisation & Depreciation (3.091) (1.619)

Write-downs (199) (333)

TOTAL OPERATING COSTS (78.174) (52.807)

EBIT 6.853 6.321

Financial Income 1.236 276

Financial Charges (5.545) (1.126)

Income/Charges from Investments at Equity 0 216

NET FINANCIAL INCOME/(CHARGES) (4.309) (634)

PRE-TAX PROFIT 2.544 5.687

Income Taxes (2.417) (1.861)

Deferred Tax Income and Charges (69) 199

TOTAL INCOME TAXES (2.486) (1.662)

NET PROFIT - CONTINUING OPERATIONS 58 4.025

NET PROFIT/(LOSS) - DISCONTINUED OPERATIONS 0 (118)

NET PROFIT 58 3.906

Attributable to:

Profit attributable to non-controlling interests 346 79

Profit/(loss) attributable to shareholders of the parent (288) 3.827

Other Comprehensive Income Items which may be reclassified subsequently in the P&L account(5.816) 7.369

Translation Difference recorded in Equity (5.816) 7.369

Other Comprehensive Income Items which may not be reclassified subsequently in the P&L account237 (74)

Actuarial Gains/(Losses) for Employee Benefits recorded directly to Equity 238 (106)

Income Taxes on income and charges recorded directly to Equity (1) 31

OTHER COMPREHENSIVE INCOME ITEMS (net of tax effect) (5.579) 7.295

Attributable to:

Profit/(loss) attributable to non-controlling interests (679) 106

Profit/(loss) attributable to shareholders of the parent (4.842) 11.095

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Statement of Changes in Equity

Euro thousands

Share capital Legal ReserveShare premium

reserveIAS 19 Reserve

Other

Reserves

Translation

Difference

Retained

EarningsGroup Profit Group Equity

Non-Control.

Interest Capital

& Reserves

Non-

Controlling

Interest

Profit/Loss

Non-

Controlling

Interest Equity

Total Equity

December 31, 2015 37.171 0 109.879 (1.361) (27.311) (379) 86.424 (16.663) 187.760 23.704 263 23.967 211.727

Net Profit/(loss) (288) (288) 346 346 58

Other changes in the year 4.503 238 (4.791) 16.941 16.891 (1.025) (1.025) 15.866

Gains/(losses) recorded directly to equity 0 0 4.503 238 0 (4.791) 16.941 (288) 16.603 (1.025) 346 (679) 15.924

Allocation of the 2015 result (16.663) 16.663 0 263 (263) 0 0

Allocation to reserves 7.434 (49.033) 41.599 0 0 0

Dividends 0 (489) (489) (489)

March 31, 2016 37.171 7.434 65.349 (1.123) (27.311) (5.170) 128.301 (288) 204.363 22.453 346 22.799 227.162

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Condensed Consolidated Statement of Cash Flow

Euro thousands March 2016 March 2015

EBIT 6,854 6,321

adjustments for non-cash items: 3,830 2,012

Amortisation & Depreciation 3,091 1,620

Write-down and Recovery in Value 6 13

Doubtful Debt Provision 193 320

Exch. effect on Assets and Liabilities in Foreign Curr. of Commercial Transactions 548 89

Gain/Loss on Fixed Asset Disposals (8) (29)

integrations for: (5,829) (1,939)

Income Taxes Paid (1,457) (1,960)

Unrealised Exchange Differences on Assets and Liabilities in Foreign Currencies (2,279) 696

Realised Exchange Differences on Assets and Liabilities in Foreign Currencies (2,093) (675)

CASH FLOW FROM OPERATING ACTIVITIES BEFORE CHANGES IN NET

WORKING CAPITAL4,854 6,394

Changes in Net Working Capital: (31,656) (32,478)

Change in Inventories (16,977) (12,651)

Change in Trade and Other Receivables (22,690) (18,155)

Change in Trade and Other Payables 9,156 (1,500)

Change in Other Assets/Liabilities (1,061) (422)

Change in Post-Employment and Employee Benefits (85) 250

CASH FLOW FROM OPERATING ACTIVITIES (26,802) (26,084)

Total Investment/Divestment in Intangible Assets (47) (45)

Total Investment/Divestment in Property, Plant and Equipment (1,941) (2,292)

Total Investment/Divestment of Investments measured at Cost 0 (0)

Total Investment/Divestment in Other Financial Assets (287) (140)

Acquisition of investment in Daler & Rowney Lucas Group (16,751) 0

Interest Received 45 10

CASH FLOW FROM INVESTING ACTIVITIES (18,981) (2,303)

Total Change in Equity (490) 0

Interest Paid (1,042) (947)

Total Increase/Decrease Loans and Other Financial Liabilities 126,310 5,318

CASH FLOW FROM FINANCING ACTIVITIES 124,778 4,371

Translation difference (5,816) 7,364

Other non-cash equity changes 8,374 (6,285)

NET CASH FLOW IN THE PERIOD 81,553 (22,938)

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period 17,542 30,663

Cash and Cash Equivalents net of Bank Overdrafts at beginning of the period (change in

consolidation scope) (86,710) 0

CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS AT END OF

THE PERIOD12,385 7,725

1) Cash and cash equivalents at March 31, 2016 totalled Euro 28,455 thousand; current account overdrafts


2) Cash and cash equivalents at December 31, 2015 totalled Euro 30,683 thousand; current account overdrafts


3) The cash flows are presented using the indirect method. In order to provide a more complete and accurate

presentation of the individual cash flows, the effects from non-cash operations were eliminated (including the

conversion of statement of financial position items in currencies other than the Euro), where significant. These

effects were aggregated and included in the account “Other non-cash changes”.

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Euro thousands March 2016 December 2015

OPENING CASH AND CASH EQUIVALENTS 17,542 30,663



CLOSING CASH AND CASH EQUIVALENTS 12,385 17,542



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Transactions relating to atypical and/or unusual operations

In accordance with Consob Communication of July 28, 2006, during 2016, F.I.L.A. S.p.A.

did not undertake any atypical and/or unusual operations as defined by this communication,

whereby atypical and/or unusual operations refers to operations which for size/importance,

nature of the counterparties, nature of the transaction, method in determining the transfer

price or time period (close to the year end) may give rise to doubts in relation to: the

correctness/completeness of the information in the financial statements, conflicts of interest,

the safeguarding of the company’s assets and the protection of minority shareholders.

The Board of Directors

THE CHAIRMAN

Mr. Gianni Mion

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Declaration of the Executive Officer for Financial Reporting

FILA S.p.A.Fabbrica Italiana Lapis ed Affini S.p.A.

SEDE LEGALEVia XXV Aprile 5 20016 - Pero (MI)

Documents

F.I.LA. GROUP INTERIM REPORT · Consolidated Financial Statements of the F.I.L.A. Group at March 31, 2016 Index The F.I.L.A. Group key financial highlights for Q1 2016 are reported